Wide arbitration clause bars writ adjudication of contractual liability; entire dispute sent to arbitration.

Where a contractual dispute falls within a wide arbitration clause and turns on disputed facts and contract construction, the writ court should ordinarily decline to decide liability on merits and leave the parties to the agreed arbitral forum. Applying the restriction on judicial intervention under Section 5 of the Arbitration and Conciliation Act, 1996, the Court treated the entire dispute, including liability under the contract, as arbitrable. It also directed release of the amounts deposited without prejudice to the parties' rights before the Arbitral Tribunal.

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Issues: (i) whether, in the presence of a wide arbitration clause, the writ court ought to have adjudicated the contractual dispute relating to liability for carrying charges; (ii) whether all disputes between the parties, including the question of liability under the contract, were required to be referred to arbitration.

Issue (i): whether, in the presence of a wide arbitration clause, the writ court ought to have adjudicated the contractual dispute relating to liability for carrying charges.

Analysis: The contract contained an arbitration clause covering disputes arising out of the construction, meaning, operation, effect, or breach of the agreement. The controversy turned on disputed questions of fact and on the construction of the contractual terms governing delivery, payment arrangements, and carrying charges. Where such issues arise from a private contract and an agreed arbitral forum is available, the writ court should ordinarily refrain from entering upon the merits of the dispute.

Conclusion: The writ court ought not to have determined the contractual liability issue on merits.

Issue (ii): whether all disputes between the parties, including the question of liability under the contract, were required to be referred to arbitration.

Analysis: Section 5 of the Arbitration and Conciliation Act, 1996 limits judicial intervention in matters governed by the Act. The arbitration clause was broad enough to take in the entire dispute, including construction of the contract and the consequences of alleged breach. In the peculiar facts, the Court exercised power under Article 142 of the Constitution of India and directed that all disputes and differences be resolved through arbitration, with the amounts already deposited to be paid over without prejudice to the parties' rights before the Arbitrator.

Conclusion: Yes. The entire dispute was directed to arbitration.

Final Conclusion: The appeals were allowed to the extent that the contractual controversy was relegated to arbitration, and the interim deposit was ordered to be released without affecting the parties' substantive rights before the Arbitral Tribunal.

Ratio Decidendi: Where a contractual dispute is covered by a wide arbitration clause and turns on disputed facts and contract construction, the writ court should ordinarily decline to adjudicate the merits and leave the parties to arbitration, particularly in view of the restriction on judicial intervention under Section 5 of the Arbitration and Conciliation Act, 1996.

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